Trade problems will persist even if U.S. signs NAFTA

Trade challenges from U.S. firms will continue to cause turbulence for Canada even if talks to modernize NAFTA are successful, said one senior Canadian government official.

Canada sends 75 per cent of its goods exports to the United States and is vulnerable to what Ottawa complains is increasing U.S. protectionism since President Donald Trump took power in January 2017.

Talks to update the North American Free Trade Agreement are moving slowly as Canada and Mexico seek to address a series of radical U.S. demands for change. The negotiations were supposed to wrap up by end-March look set to overrun by months.

“Even if a new NAFTA were to be signed tomorrow I think we would still face a lot of turbulence in our relationship with the United States on trade,” said Timothy Sargent, the top bureaucrat in Canada’s Trade Ministry.

According to Reuters, Sargent – speaking to an Ottawa conference organized by the Canadian Global Affairs Institute – noted recent U.S. moves to impose duties on Canadian softwood lumber, commercial airliners and some paper products. All were prompted by complaints from American firms.

Sargent also cited Trump’s recent move to place duties on imports of solar panels.

“I think we can expect more of that,” he said. “The way the U.S. system is set up (makes) it very easy for businesses that think they face challenges to go and get countervail or antidumping actions. So I think there are very big challenges for Canada.”

Last December Canada launched a wide-ranging trade complaint against the United States at the World Trade Organization, challenging Washington’s use of anti-dumping and anti-subsidy duties.

U.S. Trade Representative Robert Lighthizer, speaking at the end of the most recent NAFTA talks in Montreal last month, called the move “unprecedented, imprudent, even spiteful.”